Promotion

The investment bank Morgan Stanley recently announced a set of new policies for its junior associates, offering higher base pay and a faster track to promotion, while also underscoring its work-life balance policies, Preeti Varathan reported at Quartz last week:

According to its memo, Morgan Stanley is raising base pay for associates in investment banking and capital markets by 20% to 25%. It is also speeding up its promotion timeline for high-performing analysts—the entry-level position below associate—from three years to two. The memo also reiterated the bank’s current vacation and hours policies: two mandatory one-week vacations every year and limited staffing on Fridays and weekends.

Wall Street has long had a reputation for debilitating hours, consecutive all-nighters, and frequent weekend work. But even the most competitive firms are now grappling with a new generation’s insistence on rapid promotions and better work-life balance. “The ability to recruit, develop, and retain top talent by offering attractive career opportunities is a key priority,” the memo noted.

Indeed, at a time when the labor market is tight and employers in all industries are having to compete harder for talent, it’s unsurprising to see another large employer make investments in its most junior employees. The financial sector, however, has also been grappling for several years now with a particularly difficult employer brand problem. More than ever before, prospective employees now question whether the lucrative rewards of investment banking’s traditional high-stress, high-pay model are worth the costs to their quality of life.

The Ascend Foundation, a non-profit Pan-Asian career lifecycle organization, published a report this week on racial inequality in the US tech sector. Analyzing EEO-1 data for 2015-2017 from hundreds of San Francisco Bay Area tech companies, the study concluded that “diversity in technology leadership roles has generally stagnated over the last decade,” while race is “an increasingly more significant impediment than gender to climbing the management ladder, with Asian women and Hispanic women most affected.” Other key findings include:

Asians are the least likely to be promoted to managerial or executive positions, in spite of being the largest minority group of professionals and the most likely to be hired. In particular, Asian women are the least represented group as executives, at 66% underrepresentation.

White men and women are twice as likely as Asians to become executives and hold almost three times the number of executive jobs.

Even though white women are now substantially more successful in reaching the executive level than ALL minority men or women, white men are still 47% more likely than white women to be executives.

Both Blacks and Hispanics have declined in their percentage share of the professional workforce despite efforts to hire more underrepresented minorities.

“When we used the Executive Parity Index to compare the numbers of minorities as executives to their numbers in the workforce, it was clear that that efforts to promote more Asians, Blacks, and Hispanics have made no meaningful impact to the minority glass ceiling,” said Buck Gee, a former vice president and general manager at Cisco Systems who is an Ascend executive advisor and a study co-author. “That said, we saw progress made by white women, so we know tech companies can change. Now it’s time to do the same for minority men and women.”

This report represents a major contribution to the literature on racial diversity and discrimination in the tech sector, particularly in dismantling the myth that Asian-Americans are unaffected by bias or even unfairly advantaged. What Ascend found was that while Asian employees are not overtly discriminated against in policies or practices, they observed “a pattern of cultural traits among some Asians that did not align with leadership expectations in Western corporate culture, such as risk-taking and being confrontational,” Gee tells Wired’s Nitasha Tiku:

The development of business software and advancement of analytics are playing a big role in shaping the future of the HR function, and diversity and inclusion is no exception to this change. Last year, SAP announced a commitment to building software to enable corporate diversity on its popular SuccessFactors HCM Suite. Updates beginning this month will aim to remove bias from the hiring, performance review, and promotion processes.

Companies will have the option to set rules for their organizations, such as triggering a notification when a woman who has previously been rated highly gets down-rated after they take a leave of absence (which could be indicative of bias against women who take maternity leave) or if someone who has been rated highly consistently for years has been overlooked for promotions.

Sara Bean at Workplace Insightpasses along a global survey from Korn Ferry finding that 63 percent of employees would rather receive a promotion with no salary increase than a raise without a promotion this year:

One reason for this, the research from Korn Ferry suggests, is that many organizations are not doing an adequate job of creating clear advancement opportunities for professionals. More than half (56 percent) of respondents who did not get a promotion within the last 12 months cited “bottleneck or nowhere to go” as the main reason. Nearly one-fifth (19 percent) said office politics got in their way of moving up the ladder, and while 39 percent said they did receive a promotion within the last year, less than half (45 percent) said they expect to receive a promotion in the coming year. Also, 84 percent said that if they were passed over for a promotion, the No.1 action they would take was to identify the reason and work to improve. The vast majority (88 percent) said that if they wanted a promotion, the No. 1 action they would take would be to have a conversation with their boss and identify growth areas that would enable them to move into the next role.

This finding seems consistent with something we at CEB observed in our study on high-potential strategies last year: HIPO engagement depends more strongly on these employees’ satisfaction with their skill development and career progress than on satisfaction with their compensation. Indeed, failure to provide the right progression opportunities can increase HIPO turnover risk by 15 percent.

(CEB Corporate Leadership Council members can read the full study here.)

Qualified internal candidates are often overlooked in favor of outside hires, Wade Burgess, vice president of LinkedIn Talent Solutions, observes at the Harvard Business Review—and being overlooked for a promotion is a significant driver of attrition. Burgess has some theories as to why this is happening, foremost of which is that hiring managers don’t see their internal candidates as having the right skills:

Hiring managers think existing employees lack the exact skill match they’re hoping to find, or hiring managers are looking for newer skills that aren’t in evidence yet at their organization. Here’s a common scenario when it comes to the former: A hiring manager shares a healthy list of job requirements and asks their recruiter to find someone who fits the bill. But it’s tough to find candidates whose skills fit precisely, especially given the pace of change today. Skills evolve and emerge so rapidly that unless you have an organization-wide focus on professional learning and development, it’s unlikely that your team will be able to perform their day job while staying current on the latest skills — especially when it comes to tech-focused roles.

Jobs themselves are changing quickly, too. As the World Economic Forum notes, “Jobs exist now that we’d never heard of a decade ago. One estimate suggests that 65% of children entering primary school today will ultimately end up working in completely new job types that aren’t on our radar yet.” That’s already happening today. Consider professionals working as app developers, social media managers, or driverless car engineers. Five years ago, if a hiring manager had been searching for those skills in their workforce, they’d be hard pressed to find them. Yet somehow, people with no specific experience with those roles were able to tackle them successfully.

As it happens, my colleagues and I at CEB have been thinking a lot lately about internal leadership candidates and how best to develop them while conducting our latest research on high-potential talent strategies. Most organizations expect at least 40 percent of their senior leadership roles to look significantly different in the next five years. In an environment where leadership requirements are changing faster and in more unpredictable ways than ever, organizations’ high-potential strategies are trying—and largely failing—to hit a moving target. One common strategy is to try and hedge against future skill gaps by rotating potential leaders through different jobs to diversify their skills and experience and improve their agility to cope with changing leadership requirements.

Development is undoubtedly an important component of any HIPO strategy, but our research finds that this particular strategy is not as successful as many believe.

The latest report on women in the workplace from Lean In and McKinsey focuses on the challenges women still face when it comes to getting ahead in corporate America. Quartz’s Oliver Staley highlights the report’s key findings:

For every 100 women promoted past entry level positions, 130 men are promoted. Women are less likely to receive challenging assignments, participate in meetings and have access to senior leaders. And the pipeline of promotion shows women are being passed over at every stage (men and women are dropping out of the workplace at equal rates, so the numbers can’t be blamed on attrition) …

The survey revealed that more women then men asked for a raise, 29% to 27%, but that in response, 30% of women were told that they were being “bossy,” “aggressive,” or “intimidating,” compared to 23% of men. Women also say they receive less feedback from managers than men. While 46% of men say they receive difficult feedback, only 36% of women do. Managers say the biggest reason they fail to give women feedback is a fear of being mean or hurtful.

Sara Bean at Workplace Insightparses a new report showing that the gender pay gap remains significant in the UK and that the motherhood penalty—the phenomenon whereby women who have children lose out on income and job status in the long term—seems to be the main culprit:

Research by the Institute for Fiscal Studies (IFS) funded by the Joseph Rowntree Foundation found that on average, women in paid work receive about 18 percent less per hour than men, but this wage gap is smaller when comparing women before they become mothers. The gap widens consistently for 12 years after the first child is born, by which point women receive a third (33 percent) less pay per hour than men. The widening of the hourly wage gap after childbirth is associated with reduced hours of paid work, but this is not because women see an immediate cut in hourly pay when they reduce their hours. Rather, women who work half-time lose out on subsequent wage progression, meaning that the hourly wages of men (and of women in full-time work) pull further and further ahead.

In addition, women who take time out of paid work altogether and then return to the labour market miss out on wage growth. … By 20 years after the birth of their first child, women have on average been in paid work for four years less than men and have spent nine years less in paid work of more than 20 hours per week.

Meanwhile, at Personnel Today, Jo Faragher discusses the latest National Management Survey from XpertHR and the Chartered Management Institute, which finds that women “continue to receive fewer promotions and earn less than men,” and make less money in managerial roles: